Mortgage approvals, overdrafts and consumer credit remain below 2019 levels

Usage of overdrafts has been around 25% lower than 2019

According to the report, mortgage payment breaks were most common among loans with a previous modification (40%). Picture: iStock

Household demand for mortgages and consumer credit remains below 2019 levels due to the shock of Covid-19 a report from the Central Bank states.

The Central Bank has today published a special edition of the Household Credit Market Report providing information on the household credit market since the emergence of the pandemic.

"Covid-19 represents a substantial shock to households and the economy," the report states. "During the initial period of restrictions, over a million individuals in the labour force were in receipt of state income support and close to a fifth of all households reported lower income."

The report also found household demand for mortgage and consumer credit dropped in the initial phase of the pandemic before recovering but remains below 2019 levels.

Households’ usage of overdrafts has been around 25% lower year-on-year each month between May and August 2020.

In early September, 6.1% of Irish private dwelling home (PDH) mortgages and 4.3% of consumer loans were on a payment break. Close to half of Irish PDH mortgage borrowers opting for the first three-month payment break did not require extension.

According to the report, mortgage payment breaks were most common among loans with a previous modification (40%). In addition, counties with high rates of pandemic unemployment payments such as Kerry, Donegal and Dublin commuter counties had higher mortgage payment break shares. 

"Uncertainty is high as large numbers of households remain reliant on state income supports, particularly in more directly affected sectors," the report states.